JUDGMENT

(Prayer: Appeal filed under Clause 15 of Letters Patent against the order dated 11.06.2021 passed in WP No. 22901 of 2010 on the file of this Court.)

R. Mahadevan, J.

Aggrieved by the order of dismissal dated 11.06.2021 passed by the learned Judge in WP.No. 22901 of 2010, the present intra-court appeal has been filed by the appellant / writ petitioner.

Facts.

2. The case projected by the appellant in the writ petition would run thus:

2.1. The appellant is engaged in the business of software development and they render services to its wholly owned subsidiaries outside India, City Group entities and also unrelated third party customers. For the assessment year 2006-2007, they submitted their return on 30.11.2006 declaring the total income of Rs.9,26,58,233/-, which was assessed by the Assessing Officer under Section 143 (1) of The INCOME TAX ACT (in short, “the Act”) on 14.03.2008 and a refund of Rs.4,86,96,384/- was issued on 28.03.2008.

2.2. Subsequently, pursuant to the proceedings of the Commissioner of Income Tax, Chennai, dated 25.08.2008, the third respondent issued a fresh notice under Section 143 (2) on 04.09.2008 to the appellant. In response to the same, the representative of the appellant appeared before the third respondent and furnished the books of accounts, including Form 3CA and 3CD as per Section 44AB of the Act.

2.3. On scrutiny of the documents filed by the appellant, it was found that the appellant had entered into international transactions with its sister concerns and the total value of such transactions exceeds Rs.15 crores. Therefore, as per Sub-Section 1 of Section 92(c)(a) of the Act, the third respondent sent a communication dated 11.11.2008 to the Commissioner of Income Tax, Chennai seeking approval to refer the matter to the Transfer Pricing Officer (in short, “the TPO”). The Commissioner of Income Tax, by a communication dated 18.11.2008 granted approval under Section 92 CA of the Act for computation of arm's length price of the appellant. Accordingly, a reference was made to the TPO under Section 92(c)(a) of the Act.

2.4. On such reference, a communication dated 27.02.2009 was sent by the second respondent informing about the reference made under Section 92CA of the Act and requested the appellant to furnish the annual reports for the last 3 years as also the copy of computation of total income. Following the same, another communication dated 28.04.2009 was sent to the appellant calling upon them to furnish the documents as sought for in the communication dated 27.02.2009, to which, the appellant sent a reply dated 12.05.2009 along with the documents sought for by the second respondent. On receipt of the same, enquiry was conducted on various dates and ultimately, a draft assessment order was passed by the third respondent on 31.12.2009. Thereafter, the appellant filed their objections before the first respondent / Dispute Resolution Panel (in short, “the DRP”) and the Assessing Officer. Before the DRP, an objection with regard to limitation was also raised. However, the DRP dismissed the said objections, by order dated 24.09.2010. Challenging both the orders of the third respondent and the first respondent, the appellant company filed writ petition No.22901 of 2010, invoking Article 226 of the Constitution of India.

3. Before the learned Judge, the following contentions were raised on behalf of the appellant:

3.1. The reference made by the third respondent to the second respondent is contrary to the mandate as contained under Section 153 of the Act. Section 153 of the Act prescribes time limit of 21 months from the end of the assessment year in which the return was filed, in case of regular assessment. For matters relating to 'transfer pricing' a discretion is vested with the third respondent either to complete the assessment on his own within 21 months or alternatively refer the matter to the second respondent, after getting previous approval from the first respondent. When once the matter is ref